William Blair analysts discuss biotech companies SAGE Therapeutics Inc (NASDAQ:SAGE) and EXACT Sciences Corporation (NASDAQ:EXAS) after developments that will improve the company’s future outlook. Below, the analysts discuss positive trials for Sage’s newest pipeline drug and an upcoming review that could further popularize Exact Sciences’ drug Cologuard.
SAGE Therapeutics Inc
Analyst Tim Lugo goes into detail about Sage Therapeutics’ SAGE-547 trials after it received top-line results from its Phase II trial. SAGE-547 is a treatment for severe postpartum depression, or PPD.
The trial found that the endpoint of depression, measured by the Hamilton Rating Scale of Depression, was 12.22 points lower when a patient used SAGE-547 instead of a placebo. Although the size of the study was small, the results clearly show the benefits of using SAGE-547. The analyst feels that the “larger patient population and the potential indication expansion in the depression space” will allow the company to significantly expand.
Remission of depression after 30 days, a major data point for the trial, was found in 70% of the patients using SAGE-547 versus 18% in the placebo group. Additionally, the patients that used the treatment reported less adverse events and less psychiatric disorder AEs. Lugo is encouraged by these numbers, with safety issues being at the forefront of new drugs and treatments.
The company is expected to continue its phase II study with SAGE-547 by beginning with moderate PPD patients. Additionally, Sage will begin a Phase II double-blind, placebo controlled PPD trail with SAGE-217, its oral treatment which is expected to eventually replace SAGE-547 in the market.
Sage’s reach is currently focused on rare, orphan indications. The analyst believes that SAGE-547, a molecule approach to depression, could increase the reach of the company. Lugo notes that investors should keep an eye on SAGE-547’s Phase II STATUS trail which is set to be released in the second half of the year.
The analyst maintained his Outperform rating with an increased price target of $75, marking an increase of 62% from current levels.
According to TipRanks, Lugo has a yearly average loss of 8.5% with a 36% success rate. The analyst has a 1.1% average loss when recommending Sage Therapeutics, and is ranked #3,767 out of 4038 analysts.
TipRanks shows that out of the 7 analysts who rated Sage Therapeutics in the last 3 months, 86% gave a Buy rating and 14% gave a Sell Rating. The average 12-month price target for the stock is $69.33, marking a 50.03% increase from current levels.
EXACT Sciences Corporation
Analyst Brian Weinstein expresses a positive outlook for Exact Sciences following the National Committee for Quality Assurance, or NCQA, announced that it is beginning and off-cycle review of colon cancer screening.” The review is scheduled for July 13th until August 10th.
The analyst believes NCQA decided to “reevaluate its stance” on colon-cancer, an important disease for screening, after the USPSTF issued new guidelines in June. The press release noted NCQA’s scientific guidelines during the screening will match up with USPSTF suggestions.
Weinstein believes Cologuard, Exact Sciences colon-cancer drug, will fit NCQA’s guidelines. This would most likely lead to Cologuard being in HEDIS quality metrics for 2017 and not 2018, which was the original expectation. Inclusion in this metric means that “payers, health systems, and physicians will now be incented to recommend Cologuard as part of their colon cancer screening options without being penalized quality metrics.”
The analyst expects the company to be on better ground following this review from NCQA. He isn’t expecting such a meaningful short-term benefit, but he believes that investors will see the company’s performance improve throughout the year. Improvement will be credited to TV ad campaigns, a more clear message, additional players signing up and the benefits of “Anthem territories coming on board.”
The analyst acknowledges that the company has had difficulties over the past year and that his 2016 estimates are generous. Nonetheless, his expectation of Cologuard passing the upcoming NCQA review raised his long-term outlook.
The analyst maintained his Outperform rating with a 52 week price target of $29, marking an increase of 116% from current levels.
According to TipRanks, Weinstein has a yearly average returns of 0% with a 51% success rate. The analyst has a 16.2% average loss when recommending Exact Sciences, and is ranked #2,577 out of 4038 analysts.
TipRanks shows that out of the 8 analysts who rated Exact Sciences in the last 3 months, 75% gave a Buy rating and 25% gave a Hold Rating. The average 12-month price target for the stock is $12.57, marking a 6.54% decrease from current levels.